CSX - All posts tagged CSX

If you’re looking for a short-term entry in the stocks that drive the Dow Jones Transportation Average, you’ve got one now.

Rail operator Norfolk Southern’s (NSC) preannouncement of weak third-quarter earnings has cast a pall over the entire sector Thursday. NSC is down nine percent in afternoon trading. Rail stocks CSX Corp. (CSX) 5.1, Union Pacific (UNP) and Kansas City Southern (KSU) are down anywhere from three to five percent.

The transport average itself is down 2.9% in afternoon trading, dragging down the iShares DJ Transportation Average Index Fund (IYT) by a similar amount.

The buy-on-weakness theme is being revisited by analysts when it comes to single stocks. Here’s BMO Capital’s Fadi Chamoun on Norfolk Southern:

Aside from low valuation and solid productivity trends, the fundamentals underpinning the merchandise and intermodal segments remain positive. Also, utility coal has bottomed and could recover starting in 2013 assuming normal weather patterns. The outlook for export coal is poor but we have reflected weaker freight rates and carloads in our forecast. The stock has been range-bound at $68–75 due to poor visibility on coal and if it revisits the lower end of the range as a result of weaker-than-expected Q3/12, the pullback should be considered a particularly attractive buying opportunity.

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Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.